Unit Investment Trust Funds (uitf)

[qrv777]

Dr. Pepper is right. You have to first specify your priorities with regards to your objectives with regards to your investments. the $ and P MMF are for risk adverse/conservative investors who are more concerned for capital preservation and long term appreciation. Proof of that happened last May when other UITF's NAV values went down while the $MMF was unaffected and still exhibited some growth. However, its growth increments are far less than the other UITF's in BDO's stable. The P BF was heavily affected by last May's heavy withdrawals but has exhibited increasing growth in NAV values for the past 2 months.

 

 

these are extra money.... (dead money for us) meaning its ok to have it invested for two - five years.... without spending it... mga 1M lang combine.. hehe (maliit lang po)

[Dr_PepPeR]

these are extra money.... (dead money for us) meaning its ok to have it invested for two - five years.... without spending it... mga 1M lang combine.. hehe (maliit lang po)

 

If you don't plan to touch the money for two to five years, for UITF I would suggest that you put it in a balanced fund like the BDO Balanced Fund, or a UITF that has a combination of both stocks (equities) and fixed income outlets; or the BDO Bond Fund, which has longer term fixed income securities. They would tend to get the highest returns over something like 2 - 5 years. If you have about P1 Million, you might want to try putting that in a Treasury or Trust product that you can leave for five years, since this becomes tax exempt.

[jopoc]

im not really good into investments and money market or the likes. i really hate those jargons and technicailities. hehehe

 

but i would like to ask, if i invest for.. say, the minimum, would it be ok that i regularly add the investment as if i am depositing in a bank regularly

 

to illustrate, i invest 50k, and monthly i add 10k. is that allowed?

[qrv777]

im not really good into investments and money market or the likes. i really hate those jargons and technicailities. hehehe

 

but i would like to ask, if i invest for.. say, the minimum, would it be ok that i regularly add the investment as if i am depositing in a bank regularly

 

to illustrate, i invest 50k, and monthly i add 10k. is that allowed?

 

BDO Peso Money Market pwede yan.. 10K lang at ang minimum requirement and you can add anytime since you can pull out your investment any time unlike the other UITF investment na may holding period na 30 days.

Edited October 18, 2006 by qrv777

[qrv777]

correction lang sa previous post ko.. yung PMMF minimum investment 100,000.00

[Dr_PepPeR]

im not really good into investments and money market or the likes. i really hate those jargons and technicailities. hehehe

 

but i would like to ask, if i invest for.. say, the minimum, would it be ok that i regularly add the investment as if i am depositing in a bank regularly

 

to illustrate, i invest 50k, and monthly i add 10k. is that allowed?

 

Yes, that is allowed for most UITF products. The minimum initial subscription and minimum addtional subscription amounts are stated in the advert materials.

 

If you hate jargon and technicalities, what more do other people think when we talk in legalese?

[tanjose]

A PRIMER ON... UNIT INVESTMENT TRUST FUNDS

 

Q: What is a Unit Investment Trust Fund (UITF)?

A: UITF is a pooled investment fund that commingles the monies of investors into a single dynamic portfolio of investments and made available by units of participation. The units of participation will be based on the price of the fund on date of purchase. The UITF was created by the issuance of BSP Circular 447 to align the management of pooled investment funds with global standards.

 

Q: How is the price of the fund computed?

A: The price of the fund is the Net Asset Value Per Unit (NAVPU). The NAVPU is equal to Net Asset Value (NAV) divided by the outstanding units of participation in the fund.

 

Q: What is Net Asset Value (NAV)?

A: NAV is the total market value of the financial instruments of the fund less expenses such as taxes, fees and other qualified operating expenses.

 

Q: Why is market price used for valuing the financial instruments of the fund?

A: UITF employs global standards by using a mark-to-market (MTM) valuation method for all financial instruments of the fund. This means instruments are valued daily against end of day market prices. It provides equitable treatment to investors coming in and out of the fund because it offers a fair price for the purchase and redemption of units of participation.

 

Q: Is investing in UITFs safe?

A: Yes. Investments will be limited to high-grade and highly-liquid instruments such as time deposits government securities. However, because of the valuation method used, an investor may be exposed to price risk when he redeems, if interest rates are volatile. Client can defer redemption until market conditions become more favorable. It should be noted that exposure to price risk in UITFs is the same as in other long-term investments.

 

Q: What are the benefits of participating in UITFs?

A: A: Investors can enjoy several benefits:

 

Ability to participate in high-yielding long-term financial instruments in the fund but will not necessarily lock up client's money.

 

With a minimum required contribution, participants can enjoy a wide selection of financial instruments and thus minimizing risks. Clients have the opportunity to access different instruments not normally available to retail investors.

 

Opportunity for higher returns due to possible capital gains on top of accrued income.

 

Pool of funds can reduce transactional costs bringing potential savings.

 

Q: What are the other global standards used by the UITF?

A: An accredited BSP 3rd party custodian will safekeep the securities of the fund while an independent auditor acceptable to the BSP will audit each UITF annually.

 

Q: How will an investor know where the fund is invested?

A: A list of prospective and outstanding financial instruments of the fund will be made available at the Head Office of Asiatrust Bank.

 

Q: How can an investor compare the performance of their trustee bank versus others?

A: At least once a week, all trustee banks will publish in major dailies, the performance of the fund, which include the latest NAVPU and the Return on Investment.

 

Q: Why cannot an indicative rate be quoted?

A: Indicative rates cannot be quoted because of the valuation method used.

 

Q: What will an investor receive to evidence his participation?

A: An investor will be receiving a Confirmation of Participation that indicates the name of investor, value date, NAVPU, currency amount of investment and the number of units pruchased.

 

Q: What is an ideal minimum investment horizon for UITF?

A: We are encouraging a minimum investment horizon of at least one (1) year because the fund has opportunities for higher returns due to possible capital gains on top of accrued income.

 

Q: When can an investor withdraw his investment?

A: Investors may withdraw after the minimum holding period of the UITF has been met. The investor can still redeem his investment even before the required minimum holding period but subject to an exit fee.

 

Q: Why is there a need to impose an exit fee?

A: The exit fee will be used to defray the processing cost of the client's pretermination in the fund.

 

You may post here or PM me for any questions. Thanks for looking.

How much is the minimum amount of allowable investment? Does the Bank give us a monthly update on the status of our investment?

[parbust3r]

How much is the minimum amount of allowable investment? Does the Bank give us a monthly update on the status of our investment?

 

 

minimum is different for all the products. youll have to do a little research on the product that you want to get into.

Uitfs and Mutual Funds have webpages and you can check the status daily onlinne.

[Talley]

Good day All,

 

For those interested in UITF's and Mutual Funds, here are a couple of sites for you.

 

http://www.uitf.com.ph/ <--- if you want to check the returns of different UITF's

 

http://www.icap.com.ph/factsfignavps.asp <--- if you want to check the returns of differnt Mutual Funds

 

Have a good day people.

 

Carpe Noctem

[Guest wackeen]

UITF's are complicated, but they are intended to simplify one thing: fund management. If you believe you can grow your money by making your own decisions on asset allocation (or going into business) then this is not for you.

 

UITF is about relinquishing control and entrusting that 1) the expertise of the bank's fund managers and 2) the buying power of a large pool of funds you are throwing your money into, will together result in larger long-term returns. If you want a guaranteed return, then this is also not the right product for you. Having to worry about a guaranteed return affects how the fund is managed, and prudence will result in lower yields in the long run.

 

Ignoring the mismanagement of the pre-need companies, the nature of their 'guaranteed' products forced them to keep paying out much more than their original payments could have grown to, no matter how these were invested. This jeopardized the funding for future availments and companies only admitted they could not honor future commitments even if they saw this coming years ago.

 

The UITF is immune from this problem in that by its unitized nature you know that what you pay when you subscribe and what you receive when you redeem are your 'fair' share of the funds. If the value goes down, your money will only be lost if you choose to pull out at that time (like leaving the blackjack table after some bad hands).

 

Just my opinion.. please correct me if I misunderstand.

[Dr_PepPeR]

minimum is different for all the products. youll have to do a little research on the product that you want to get into.

Uitfs and Mutual Funds have webpages and you can check the status daily onlinne.

 

Thanks. Different UITF products are targetted at different types of investors, so the terms can be a bit varied. You can also drop by a bank and get some brochures for their UITF products, which will have the objectives and minimum amounts there.

 

Good day All,

 

For those interested in UITF's and Mutual Funds, here are a couple of sites for you.

 

http://www.uitf.com.ph/ <--- if you want to check the returns of different UITF's

 

http://www.icap.com.ph/factsfignavps.asp <--- if you want to check the returns of differnt Mutual Funds

 

Have a good day people.

 

Carpe Noctem

 

Here are the features of UITF Online:

 

We are proud to announce the launching of UITF Online (www.uitf.com.ph) on September 1, 2006.

 

UITF Online is a web-based Unit Investment Trust Funds (UITF) resource and information center conceived by the Trust Officers Association of the Philippines (TOAP) and implemented by a consortium of trust institutions that manage UITFs.

 

The website is a 24/7, globally accessible communication medium that disseminates relevant information on UITF such as product features, daily and historical NAVPUs, year-on-year and year-to-date ROI’s, and graphical presentations of the various managed funds in the market today.

 

UITF Online aims to:

 

· Generate awareness on the UITF as an investment alternative,

· Empower the investing public by providing them with free access to timely and truthful facts on the UITF in order to arrive at an intelligent investment decision,

· Establish channels of communication that will educate the investing public about UITF products and provide answers to frequently asked questions on the same; and

· Promote the trust institutions and their funds to the investing public.

 

Thanks for that, Talley.

 

UITF's are complicated, but they are intended to simplify one thing: fund management. If you believe you can grow your money by making your own decisions on asset allocation (or going into business) then this is not for you.

 

UITF is about relinquishing control and entrusting that 1) the expertise of the bank's fund managers and 2) the buying power of a large pool of funds you are throwing your money into, will together result in larger long-term returns. If you want a guaranteed return, then this is also not the right product for you. Having to worry about a guaranteed return affects how the fund is managed, and prudence will result in lower yields in the long run.

 

Ignoring the mismanagement of the pre-need companies, the nature of their 'guaranteed' products forced them to keep paying out much more than their original payments could have grown to, no matter how these were invested. This jeopardized the funding for future availments and companies only admitted they could not honor future commitments even if they saw this coming years ago.

 

The UITF is immune from this problem in that by its unitized nature you know that what you pay when you subscribe and what you receive when you redeem are your 'fair' share of the funds. If the value goes down, your money will only be lost if you choose to pull out at that time (like leaving the blackjack table after some bad hands).

 

Just my opinion.. please correct me if I misunderstand.

 

Couldn't have put it any better, sir. The concept is just the same as the Common Trust Funds, except that for the requirement of the Bangko Sentral that it should be marked to market and the liquidity of the assets. Thanks.

[dexterhaba]

Sorry, it would take P4,000,000 at 6% p.a. to net P20k monthly.

 

 

can anyone give a true to life example on how much they earned using UITF? In that way,, well have a general idea if we want to take the risk or just put our money in TD... thanks much,,

[walangiba]

can anyone give a true to life example on how much they earned using UITF? In that way,, well have a general idea if we want to take the risk or just put our money in TD... thanks much,,

 

 

I believe one cannot use historical performance of the fund as a basis for future performance.

 

Rates went as high as 30+% p.a. in early 2006.

 

Unfortunately, what my placement earned in one year in Common Trust Fund (which was doing like 4% p.a. net then), was wiped out in 23 days after I transfered it to UITF during that period in May 2006 (if I may add... "when the public was misguided").

Edited October 25, 2006 by liberty

[Dr_PepPeR]

I believe one cannot use historical performance of the fund as a basis for future performance.

 

Rates went as high as 30+% p.a. in early 2006.

 

Unfortunately, what my placement earned in one year in Common Trust Fund (which was doing like 4% p.a. net then), was wiped out in 23 days after I transfered it to UITF during that period in May 2006 (if I may add... "when the public was misguided").

 

That is quite correct. That is a mantra among the UITF managers 'Historical Performance is Not a Guarantee of Future Performance'. Unfortunately, one still cannot predict the behavior of the market prices. If we could, then all of us would be quite rich by now. The historical performance can be an indicator of how well the investment manager is doing. For example, if he/she consistently outperforms the market, then it is likely he will also do it in the future.

 

Did you redeem your UITF during those black days of May? Doing so would indeed have wiped out any gains you would have made under the CTF. If you had simply stayed in, the losses would have been unrealized.

[parbust3r]

if you are investing for the medium to long term, UITFs and MFs will be a much better choice than Time deposits. In my case, Risks will be greater but returns will be worth it. It really depends on how risk averse you are.

 

I also got hit with the UITF drop but i kept my funds in BDO. Funds are slowly and steadily getting back up.

[FF]

That is quite correct. That is a mantra among the UITF managers 'Historical Performance is Not a Guarantee of Future Performance'. Unfortunately, one still cannot predict the behavior of the market prices. If we could, then all of us would be quite rich by now. The historical performance can be an indicator of how well the investment manager is doing. For example, if he/she consistently outperforms the market, then it is likely he will also do it in the future.

 

Did you redeem your UITF during those black days of May? Doing so would indeed have wiped out any gains you would have made under the CTF. If you had simply stayed in, the losses would have been unrealized.

 

hi doc! grabe ... i learned a lot from this thread. btw ... what's your take naman on the variable life funds of maulife and axa ? i'm thinking of plunking a small amount in it .

 

salamat in advance doc!

[Dr_PepPeR]

if you are investing for the medium to long term, UITFs and MFs will be a much better choice than Time deposits. In my case, Risks will be greater but returns will be worth it. It really depends on how risk averse you are.

 

I also got hit with the UITF drop but i kept my funds in BDO. Funds are slowly and steadily getting back up.

 

Good for you sir. There is one UITF that I've been watching. The peak before the May drop has still not been breached, it may take 2 months more to hit it. In the meantime, there are subscribers coming in and about an equal number of redemptioners taking a slight gain and going out.

[Dr_PepPeR]

hi doc! grabe ... i learned a lot from this thread. btw ... what's your take naman on the variable life funds of maulife and axa ? i'm thinking of plunking a small amount in it .

 

salamat in advance doc!

 

As an investment medium, the variable life funds of both Manulife and Axa are not bad choices. My take is that the costs these funds incur are higher. They are allowed marketing expenses, like agent's commissions and advertising and usually have upfront costs (like a participation fee). Then, they also ask the trust banks to invest them. My experience with agents generally is that they present an assumption of rates (which are not allowed in UITFs) more so if they still use the accrual system. So why not just go direct to the investment manager, which is more likely a bank too? But if you feel comfortable with this, no reason not to invest in these products. I just seem to have a bias for UITFs. I wonder why?

[FF]

As an investment medium, the variable life funds of both Manulife and Axa are not bad choices. My take is that the costs these funds incur are higher. They are allowed marketing expenses, like agent's commissions and advertising and usually have upfront costs (like a participation fee). Then, they also ask the trust banks to invest them. My experience with agents generally is that they present an assumption of rates (which are not allowed in UITFs) more so if they still use the accrual system. So why not just go direct to the investment manager, which is more likely a bank too? But if you feel comfortable with this, no reason not to invest in these products. I just seem to have a bias for UITFs. I wonder why?

 

you da MAN doc ! actually friend ko kasi yung manulife agent and i owe her a lot for telling me to hang on to my manulife shares when they were given out to existing plan holders.

 

huling hirit doc ... if you had some dough to invest ... could you give me 3 uitfs i could bet on? my investment horizon is 5 years para tax free.

[kapitanhook]

Interesting thread!

 

You all might want to check out fundsupermart.com. It's based in Singapore and as the name suggests, it's a Fund Supermart. You can buy and sell funds online and I think you can invest even if you're not here in Singapore.

 

The upside of using this service is you can invest in hundreds of funds and Singapore Bonds..ONLINE!

The downside is all funds here are front loaded. Most of them have a sales charge of 2.5% (but this is still at a discount compared to the 5% usually changed by banks here)

 

Are there any companies offering the same kind of service in Manila?

[Dr_PepPeR]

you da MAN doc ! actually friend ko kasi yung manulife agent and i owe her a lot for telling me to hang on to my manulife shares when they were given out to existing plan holders.

 

huling hirit doc ... if you had some dough to invest ... could you give me 3 uitfs i could bet on? my investment horizon is 5 years para tax free.

 

Unfortunately, the five year tax exemption to investments of over 5 years doesn't apply to UITF except for SPECIFICALLY TAX EXEMPT UITFs. I've found only three such tax exempt UITFs as listed below:

 

BPI Institutional Fund UITF YoY ROI = 12.3926500

ING Bank, N.V. ING Tax-Exempt Peso Fixed Income Fund YoY ROI = 23.4800000

ING Bank, N.V. ING Tax-Exempt Philippine Equity Fund (UITF) YoY ROI = 48.9300000

 

YoY ROI = Year on Year Return on Investment

[FF]

Unfortunately, the five year tax exemption to investments of over 5 years doesn't apply to UITF except for SPECIFICALLY TAX EXEMPT UITFs. I've found only three such tax exempt UITFs as listed below:

 

BPI Institutional Fund UITF YoY ROI = 12.3926500

ING Bank, N.V. ING Tax-Exempt Peso Fixed Income Fund YoY ROI = 23.4800000

ING Bank, N.V. ING Tax-Exempt Philippine Equity Fund (UITF) YoY ROI = 48.9300000

 

YoY ROI = Year on Year Return on Investment

 

salamat doc !

[Dr_PepPeR]

The financial market went crazy today due to the tiering by the BSP of interest rates. So now we have low interest rates, no investment outlets and UITF Fixed Income NAVPUs shooting up like crazy. Those who stayed in may be the lucky ones when this trend continues over to the next week.

[living well]

Hello,

 

Looking at these three UITF, taking into considertion the ROI YOY and ROI YTD and the management fees, how would you rank them in terms of you most likely to place?

 

Looking at ING, it gives a favorable yield but should I be concerened with its higher management fee?

 

Granting an even playing field, would a UITF with a lover NAVPU be a plus factor? The more units, the better?

 

Thank you.

 

1. BPI International Fund Plus

 

Bank of the Philippine Islands

 

 

A fund invested in a diversified portfolio of foreign currency-denominated fixed income instruments

 

 

Launch Date : Monday, November 02, 1998

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 0.75 % p.a. Minimum Participation : 5,000

Early Redemption Fee : 0.25% Min. Additional Participation : 500

Other Fees : Custody Fee Min. Holding Period : 30 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 129.050000 As of : Thursday, November 02, 2006

ROI % (Year-on-Year) : 12.3933 ROI % (Year-to-Date) : 4.0978

 

 

2. ING Philippine Dollar Bond Fund

 

ING Bank N.V.

 

 

The fund is invested in a diversified portfolio of USD dollar denominated fixed income instruments issued by the Philippine government, corporations, and financial institutions. The fund aims to outperform its benchmark (gross of fees and taxes), the JP Morgan Chase Asia Total Return Philippines Index.

 

 

Launch Date : Monday, May 05, 2003

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 1.25 % p.a. Minimum Participation : 0

Early Redemption Fee : 1% of Redemption Amount Min. Additional Participation : 0

Other Fees : Custody Fee 0.02% p.a. and other expenses as allowed by the BSP. Min. Holding Period : 20 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 14.573008 As of : Thursday, November 02, 2006

ROI % (Year-on-Year) : 16.2402 ROI % (Year-to-Date) : 10.6009

 

3. BDO $ Bond Fund

 

Banco De Oro Universal Bank

 

 

Fund which aims for capital appreciation and higher yields over the medium term

 

 

Launch Date : Friday, April 29, 2005

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 0.75 % p.a. Minimum Participation : 2,000

Early Redemption Fee : 0.50% of Acceptance Amount Min. Additional Participation : 0

Other Fees : 0.0195% custody fee p.a. Min. Holding Period : 45 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 117.266600 As of : Friday, November 03, 2006

ROI % (Year-on-Year) : 10.4200 ROI % (Year-to-Date) : 6.8349

[Dr_PepPeR]

Hello,

 

Looking at these three UITF, taking into considertion the ROI YOY and ROI YTD and the management fees, how would you rank them in terms of you most likely to place?

 

Looking at ING, it gives a favorable yield but should I be concerened with its higher management fee?

 

Granting an even playing field, would a UITF with a lover NAVPU be a plus factor? The more units, the better?

 

Thank you.

 

1. BPI International Fund Plus

 

Bank of the Philippine Islands

 

 

A fund invested in a diversified portfolio of foreign currency-denominated fixed income instruments

 

 

Launch Date : Monday, November 02, 1998

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 0.75 % p.a. Minimum Participation : 5,000

Early Redemption Fee : 0.25% Min. Additional Participation : 500

Other Fees : Custody Fee Min. Holding Period : 30 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 129.050000 As of : Thursday, November 02, 2006

ROI % (Year-on-Year) : 12.3933 ROI % (Year-to-Date) : 4.0978

2. ING Philippine Dollar Bond Fund

 

ING Bank N.V.

 

 

The fund is invested in a diversified portfolio of USD dollar denominated fixed income instruments issued by the Philippine government, corporations, and financial institutions. The fund aims to outperform its benchmark (gross of fees and taxes), the JP Morgan Chase Asia Total Return Philippines Index.

 

 

Launch Date : Monday, May 05, 2003

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 1.25 % p.a. Minimum Participation : 0

Early Redemption Fee : 1% of Redemption Amount Min. Additional Participation : 0

Other Fees : Custody Fee 0.02% p.a. and other expenses as allowed by the BSP. Min. Holding Period : 20 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 14.573008 As of : Thursday, November 02, 2006

ROI % (Year-on-Year) : 16.2402 ROI % (Year-to-Date) : 10.6009

 

3. BDO $ Bond Fund

 

Banco De Oro Universal Bank

 

 

Fund which aims for capital appreciation and higher yields over the medium term

 

 

Launch Date : Friday, April 29, 2005

 

Fund Type : Dollar Bond Fund Currency : US Dollar

Management Fee : 0.75 % p.a. Minimum Participation : 2,000

Early Redemption Fee : 0.50% of Acceptance Amount Min. Additional Participation : 0

Other Fees : 0.0195% custody fee p.a. Min. Holding Period : 45 days

 

--------------------------------------------------------------------------------

 

Net Asset Value Per Unit (NAVpU) : 117.266600 As of : Friday, November 03, 2006

ROI % (Year-on-Year) : 10.4200 ROI % (Year-to-Date) : 6.8349

 

I would rate them ING, BDO then BPI. This is based on YTD ROI. While ING has higher management fees, it still managed to outperform the other two dollar bond funds. Since the fees in a UITF scenario are computed everyday, then I assume that all ROIs reported are net of fees and expenses.

Edited November 4, 2006 by Dr_PepPeR